Greenback goes down after Japan rules out helicopter money
On Wednesday, the evergreen buck weakened against the Japanese yen and the common currency during Asia trade, after a Japanese top government spokesman suddenly ruled out implementing a so-called helicopter money monetary policy, which suggests that the country’s major bank should directly purchase government bonds in order to finance tax cuts or spending.
The U.S. dollar traded at ¥104.24, compared with Tuesday’s reading of ¥104.67 in New York. As for the common currency, it traded lower at ¥115.34, dropping from ¥115.87.
Improved market sentiment on expectations for Japan’s fresh fiscal stimulus have powered Tokyo shares by 8% so far this week and generated unwinding of bullish Japanese yen bets. Market participants have rushed to the safe-haven Japanese yen since Britain’s vote to leave the European Union the previous month.
Having touched a peak of ¥104.98 overnight, the US dollar was drifting lower during the Asian trading session with profit taking kicking in a bit earlier in the trading session. Additionally, Japanese corporate players such as exporters have sold the greenback on its recovery.